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290 Cards in this Set

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  • Back
Armadillos From Texas Play Rap Eating Tacos
Applicable Law
Formation of Contracts
Terms of Contract
Performance
Remedies for unexcused nonperformance
Excuse of nonperformance
Third-party Problems
Quasi Contract
-For use when you get an unfair result under K law
Elements
- P gave benefit to D AND
- P reasonably expected to be paid AND
- D unjustly enriched if P not compensated
Measure of Recovery
-Value of benefit conferred. Contract price is not measure of recovery - rather ceiling
Bilateral Contract
Results from an offer that is open as to method of acceptance
**Starting presumpmtion that EVERY DEAL is BILATERAL**
Unilateral Contract
Results from an offer that EXPRESSLY requires performance as the ONLY possible method of acceptance
Generally, a contract is a bilateral contract unless....
1. Reward, prize, contest
2. Offer expressly requires performance for acceptance
Overview of Applicable Law
What are the important issues we must know?
Common Law
UCC Art 2 (sale of goods)
Overview of Formation of a Contract - Agreement
What are the important issues we must know in looking for AGREEMENT?
Level One - Offer
Level Two - Termination of Offer
Level Three - Acceptance
Overview of Formation - Legal Enforceability
What are the legal reasons for not enforcing an agreement
- Lack of Consideration (or Substitute) for the promise
- Lack of capacity of D / promisor
- Statute of Frauds
- Existing laws that prohibit performance
- Misrepresentations
- Duress
- Unconscionability
- Ambiguity in words of agreement
- Mistakes at time of agreement as to material fact
Overview of TERMS of the Contract
What are the important issues to look for re: terms of the contract?
- Parties Words and Parol Evidence Rule
- Conduct and Course of Performance
- UCC for terms in Sales of goods
Overview of PERFORMANCE
What are the important issues for performance of contract?
- Common Law
- UCC Performance Concepts - six issues (perfect tender; rejectionl installment sales contracts; acceptance; revocation of acceptance)
Overview of REMEDIES for unexcused performance
What are the important issues to look for re: remedies?
- Non Monetary Remedies
- Money Damages for Breach (expectation)
Overview of EXCUSE of nonperformance of contract
What are the important issues to look for for excuse
- Excuse b/c of other's improper performance
- Excuse b/c of failure of a performance condition
- Excuse by reason of other party's anticipatory repudiation / inability to perform
- Excuse by reason of later contract
- Excuse by reason of later unforseen event
Overview of Third Party Problems
What are the important issues to look for re: third party?
- Third Party Beneficiary
- Assignment
- Delegation of Duties
When you have a SERVICES contract or a REAL ESTATE contract - what law applies?
Common Law
What law applies to a MIXED DEAL?
- Contract is part goods, part services OR part goods, part real estate
ALL OR NOTHING
- What is the most important part of the contract - that governs
- In contract to buy car and get two driving lessons - UCC controls b/c car is more important
What is the exception to the ALL OR NOTHING RULE for determining whether UCC or common law applies to contract?
All or nothing says that more important part of deal controls
BUT where contract EXPRESSLY DIVIDES payment b/t two, then apply UCC to sale of goodos and common law to rest
What is an offer?
1. Promise, undertaking or commitment
2. With definite and certain terms
3. Communicated to offeree
What are the forms of the questions about FORMATION??
1. Guy says we made an agreement, other guys says we never made an agreement (agreement)
2. Guy says we made an agreement, other guy says we may have agreed but there is a reason the court should not enforce this (legal enforceability)
What are the specific problems to watch out for with OFFERS?
1. Content
2. Context
Does an OFFER have to contain all material terms?
NO
Does an OFFER have to contain price?
Depends
If SALE CONTRACT of real estate - MUST contain price
If SALE CONTRACT of goods - Art. 2 does not require price (it is an offer if the parties so intend)
If S offers to sell B her car for a fair price - is there an offer?
NO - fair price is a VAGUE / AMBIGUOUS material term so not an offer (under either CL or UCC)
- Other words: reasonable; appropriate
Distinction b/t missing material term and vague material term
An offer missing a material term is still an offer
BUT
An offer with a vague material term is not an offer
What are requirements contracts or output contracts?
Are they valid?
UCC only
Contract for sale of goods can state the quantity of the goods to be delivered
- in terms of the buyer's requirements OR
- seller's output OR
- in terms of exclusivity
YES - they are valid
Ex - B offers to buy all of its grits from S for five years - VALID OFFER
What are the limitations on the flexibility of requirements contracts?
Increases on requirements by the buyer CANNOT be unreasonably disproportionate
- B buys 1000 lbs of grits for three years and then increases to 1020 - OK
- But B cannot increase to 2000
Is an advertisement generally an offer?
NO
When can an advertisement be an offer?
1. If the ad is in the nature of a reward
2. If the ad is specific as to quantity and expressly indicates who can accept
- 1 fur coat $10 - first come, first served
What is the effect of termination of an offer?
IT IS DEAD - it cannot be accepted
What are the four methods of termination of an offer?
1. Lapse of Time
2. Revocation - Words or Conduct of Offeror
3. Rejection - Words/Conduct of the OFferee
4. Death of a Party prior to Acceptance
How does an offer lapse by time?
The time is either stated in the contract or it is a reasonable time
How is an offer revoked - 2 ways?
1. Unambiguous statement by offeror TO OFFEREE of unwillingness or inability to contract
2. Unambiguous conduct by offeror indicating unwillingness or inability to contract THAT OFFEREE IS AWARE OF
Does the fact that the offeror later makes a similar offer to someone other than the offeree create revocation?
NO
If Sharon Stone hears that Epstein offered the car to Conviser but he hasn't accepted yet, she can still accept
On Jan 15, I offer to sell my car to Sharon Stone for $400 but then sell it to Conviser the next day. On that day, Sharon Stone sees Conviser driving the car and learns that he bought it - can she still accept?
NO
When is revocation of an offer sent through the mail effective?
When it is received
S offers to sell car to B for $400. B immediately accepts. B/c B accepted so quickly, S thinks the car must be worth more - can S revoke
NO - offer CANNOT be revoked after accepted.
What are the four situations where an offer cannot be revoked?
1. Option
2. Firm Offer Rule
3. Reasonably foreseeable reliance by offeree
4. Start of performance on unilateral contract
When does the offeree have an option such that the offer cannot be revoked?
If the offeror has
1. Promised to keep the offer open AND
2. This promise is supported by payment/other consideration
When does the offeree have a FIRM OFFER and what is the effect?
1. Must be offer to buy/sell goods - UCC ONLY
2. Must have signed, written promise to keep offer open
3. S must be a merchant
Then the offer cannot be revoked for UP TO THREE MONTHS
S, used car dealer, offers to sell B car for $400. Offer in writing and signed by S and expressly promises it will be held open for a week - can S revoke?
Not for a week
S, used car dealer, orally offers to sell B car for $400 and promises to hold it open for a week - can S revoke?
YES - firm offer rule does not apply because the offer is not in writing signed by S
S, used car dealer, offers to sell B car for $400. Offer in writing and signed by S and expressly promises it will be held open for six months - can S revoke?
After three months - firm offer rule only holds offer open for UP TO THREE MONTHS
S, used car dealer, offers to sell B car for $400. Offer in writing and signed by S and expressly promises it will be held open but does not state a time period - can S revoke?
Court will fix a reasonable time period that the offer should stay open (S cannot revoke) but cannot be more than three months.
S, used car dealer, makes an offer by signed writing to B to sell him a car for $400 - can S revoke?
YES - because there is no promise not to revoke.
For there to be a firm offer, the offer must contain a promise not to revoke (not just be a signed writing).
S offers to sell B her house for $100,000 and written offer promises that it can be accepted for next four months - can S revoke?
YES - b/c UCC does not apply b/c this is a sale of real estate.
Can an offeror revoke when offeree has relied on the offer?
IF the offeree's reliance was detrimental and it was reasonably forseeable - then NO
- Reasonably foreseeable that a general contractor would rely on a subcontractors offer to make its own bid - subcontractor cannot revoke
Can offeror revoke a unilateral contract where offeree started performing?
NO - start of performance pusuant to offer to enter into a unilateral contract makes that offer IRREVOCABLE for a reasonable time to complete the performance
Must be
- Unilateral
- Performance, not mere preparation
O offers P $1000 to paint O's house and offer states can be accepted only by performance. P orders paint. Can O revoke? What if the paint is an exotic color?
O CAN revoke because buying the paint was not starting performance on the unilateral contract - just preparation.
BUT if the paint was exotic, then O cannot revoke because there has been reasonably foreseeable detrimental reliance by P.
What are the three methods of INDIRECT REJECTION of an offer by the offeree?
1. Counteroffer
2. Conditional Acceptance
3. Additional Terms (CL only)
What is the effect of a counteroffer on the original offer?
Counteroffer TERMINATES the offer and becomes a new offer.
No express contract unless the counteroffer is accepted.
S offers to sell Blackacre for $10,000.
1. B says I will only pay 9000?
2. B says Will you take 9000?
1. S's offer is terminated by B's counteroffer
2. S's offer not terminated - B's answer was just bargaining so B can later accept S's offer.
What is the effect of a conditional acceptance on the originial offer?
Conditional acceptance TERMINATES the offer and becomes a new offer.
How do you know when there is a conditional acceptance?
Look for a response to an offer with one of these phrases:
if
provided that
so long as
but
on condition that
What is the mirror image rule and when does it apply?
Mirror image rule - Common Law Only - if an acceptance adds new terms, then it is treated like a counteroffer
L offers to lease bldg to T by sending T a signed lease that is silent about arbitration of disputes. T adds a paragraph providing for arbitration and signs. Has T accepted?
NO - b/c this is a real estate deal, common law applies
Additional terms in acceptance terminate the original offer and create a counteroffer
Does the UCC require mirror image of offer and acceptance?
NO - additional terms in an acceptance can still be a seasonable expression of acceptance and a contract is formed
When will additional terms NOT be a seasonable expression of acceptance under UCC?
Though generally a response to an offer that adds new terms is a seasonable expression of acceptance, IF the response makes the new terms a CONDITION OF ACCEPTANCE then no acceptance and no contract.
What are the two questions to ask when you have a fact pattern with
1. an offer to buy/sell goods
2. a response with additional terms
1. Is there a contract (or does the response condition acceptance on the additional terms)?
2. Is the additional term part of the contract?
Under UCC, when the acceptance contains additional terms, when do they become part of the contract?
1. Are both parties merchants?
- If one is not, then additional term is a separate proposal
2. If both are merchants, then general rule is that additional term is part of the contract UNLESS
- additional term materially changes offer OR
- offeror objects to the change
Epstein offers to sell his car to Conviser for $400. Conviser says I accept. Deliver it on Saturday.
There is a contract - UCC (no mirror image).
Saturday delivery is NOT part of K - not merchants so separate from K.
S, used car dealer, offers to sell car to B, another used car dealer. B - I accept. Deliver on Sat.
There is a contract and Saturday delivery is part of the contract b/c both are merchants and Sat. delivery is not material.
S, used car dealer, faxes offer to sell car to B, other used car dealer. B says - I accept if the car is delivered on Saturday. Is there a contract and is the term included?
There is no contract - this is not an additional term.
B/c contract says IF it is a conditional acceptance and therefore a counteroffer.
What is the general rule where a party dies before acceptance?
Death/incapacity of EITHER party terminates the offer
UNLESS
1. There is an option - offeree paid consideration to have offer held open
2. There is part performance of offer to enter into unilateral contract
What are the general indications for what acceptance is appropriate?
Look at the offer for info about
1. who can accept the offer and
2. how the offer can be accepted
Who can accept an offer?
Generally - offer can be accepted only by
1. person who knows about the offer
2. who is the person to whom the offer was made
Can an offer be assigned - so that someone else could accept?
NO - but an option can be assigned (unless it provides otherwise)
What are the five possible fact patterns re: methods of accepting an offer?
1. If offeree fully performs
2. If offeree starts to perform
3. If offeree promises to perform
4. The offeror and offeree are at different places and there are conflicting communications
5. The seller of goods sends the wrong goods
Is there acceptance when the offeree fully performs?
YES - BUT
Is NOTICE of performance required?
If notice is required, failure to notify is a breach of that duty and the offeree cannot enforce the contract
When is notice of performance required for full performance to be acceptance?
Look at
1. What the offer requires and
2. Whether offeree has reason to believe that offeree will not learn of acceptance
O lives in CA and owns house in TX. O offers P $1000 to paint the TX house. P paints the house but does not notify O and O pays X $1000 to paint.
P has accepted b/c full performance is always acceptance BUT b/c P has reason to believe that O will not learn of the acceptance, O has breached duty of notification and can't get paid.
When is START of performance acceptance?
Start of performance is acceptance of an offer to enter into a bilateral contract.
Start of performance is NOT acceptance of offer to enter into a unilateral contract.
Can you accept an offer of a bilateral contract by starting to perform?
YES - if the offer is open as to method of acceptance.
The start of performance is like an implied promise.
Can you accept an offer of a unilateral contract by starting to perform?
NO - the offer requires performance for acceptance.
Performance means COMPLETION of performance - start is not enough.
O offers P $1000 to paint his house. O's offer states that it can be accepted only by performance. P starts painting the house. Has P accepted O's offer so that he is contractually obligated to continue painting?
NO - P has not accepted and therefore not contractually obligated to continue.
What effect does the start of performance have on the parties to a unilateral contract?
Start of performance creates a duty in the offeror but not in offeree.
1. When the offeree starts performing, the offeror must keep the offer open for a reasonable time to complete performance.
2. When offeree starts performing, he has NOT accepted and can quit anytime.
When an offeree promises to perform, is there acceptance of the offer?
Generally yes - most offers can be accepted by promise to perform.
BUT not unilateral contracts.
B faxes order for grits to S, requesting immediate shipment.
1. Can S accept offer by sending fax promising to ship grits?
2. If S does not immediately ship?
3. If offer required acceptance by shipment?
1. Yes - S has accepted
2. S is in breach
3. S cannot accept by promise
Is there acceptance when the offeror and the offeree are at different places and there are conflicting communications?
General Rule - communication is effective when RECEIVED.
BUT
An acceptance is effective when sent IF
1. Made in a manner and by a means invited
2. the offeree has not already sent a rejection
What are the two issues with conflicting communications and acceptance?
1. Revocation and then acceptance
- Where buyer mails acceptance before receiving revocation - CONTRACT
2. Rejection then acceptance
- Where buyer mails rejection and then acceptance - NO CONTRACT - what controls is which arrives first
Conviser gets letter from Epstein offering to sell his car. On 1/10, Conviser mails his letter of acceptance. On 1/11, Conviser recieves letter from Epstein revoking his offer. Is there a contract?
YES - b/c acceptance is valid from the date it was sent but revocation is only valid when recieved - so acceptance wins.
Conviser receives letter from Phish inviting him to replace Trey. On 8/8, Conviser mails rejection of offer. On 8/9 he changes his mind and mails acceptance.
If rejection letter arrives first, then NO CONTRACT.
- Though acceptance is usually measured when sent - that is not true where mailed AFTER rejection.
BUT if he faxed the acceptance so it arrived first, then CONTRACT.
If the seller of the goods sends the wrong goods, is there a contract?
Generally, the seller is deemed to have accepted and then breached the contract.
- If B orders case of petroleum jelly (offer) but S ships case of grape jelly (acceptance + breach)
When will the seller sending the wrong goods NOT be an acceptance?
IF the seller sends the wrong goods with an explanation.
This is ACCOMODATION - it is considered a counteroffer and no breach.
-B orders 100 red widgets; S sends 100 blue widgets w/explanation out of red, can you use blue - NO CONTRACT, Counteroffer
What is consideration?
Bargained for legal detriment
Have to look at each promise separately
Identify promisor (D) and ask what did he bargain for.
Identify promisee(P) and ask what detriment did she incur
What are the forms of consideration?
1. Performance (doing something not legally obligated to do)
2. Forbearance (not doing something legally entitled to do)
3. Promise to perform
4. Promise to forbear
What are the possible issues to look for around consideration?
- Bargained for
- Legal Detriment
- Promise as consideration
- Adequacy of consideration
- Past consideration
- Preexisting contractual or statutory duty rule
- Part payment as consideration for release (promise to forgive balance of debt)
What does the bargained-for requirements for consideration mean?
Asked for by promisor IN EXCHANGE for her promises
- Look for the person who is not doing what they said they would, ask did they ask for or request ANYTHING
L rents apt to T. One month before lease expires, L sends T a letter promising to renew the lease at the same rental rate. T paints the apartment. L then increases rent. T sues, L argues there was no contract b/c no consideration.
T painting the apartment was not consideration for L's promise to renew at same rent.
L never asked T to paint the apartment
What is a legal detriment?
Almost anything - you incur a detriment when you promise not to do something that you could do, even if you would not actually do it
Can a promise be consideration?
YES - one promise can be consideration for another promise
BUT cannot be an illusory promise
B and S enter into written agreement where B promises to buy S's house and S promises to sell to B unless she changes her mind - Is there consideration?
NO - S's promise is not consideration for B's promise b/c it is illusory.
When does adequacy of consideration matter?
NEVER - not relevant
Can past consideration make a contract legally enforceable?
Generally no
UNLESS the promisor expressly requests the consideration and the promisee expects to be paid
Homer see Lisa in danger and asks Apu to save her, knowing that Apu would expect to be paid. After Apu saves Lisa, Homer promises to pay Apu $3000. Is this legally enforceable?
YES - Even though past consideration - Homer expressly requested Apu save Lisa (the consideration) and knew there was an expectation of payment
Under the common law, can doing a contractual/statutroy duty be consideration for a contract?
NO - doing what you are already legally obligated to do is not consideration for a promise to pay you more to do merely that.
Need NEW consideration.
EXCEPTIONS
- Addition to or Change in Performance
- Unforeseen Difficulty so severe as to excuse performance
- Third party promise to pay
Kinky contracts with Lil Jon to perform at Town Hall for $15K. Kinky refuses to sing unless he is paid $20K. Lil Jon promises to pay $20K. Kinky performs but Lil Jon only pays 15K.
Promise to pay the extra $5000 is not legally enforceable under CL b/c Kinky was already obligated to sing
Kinky contracts with Lil Jon to perform at Town Hall for $15K. Kinky refuses to sing unless he is paid $20K. Lil Jon promises to pay the extra $5000 if Kinky sings a different song.
Lil Jon's promise to pay the extra $5000 is enforceable because it was for the CHANGE in performance (playing a different song)
Kinky contracts with Lil Jon to perform at Town Hall for $15K. The sound system at Town Hall is inoperative. Lil Jon offers Kinky an additional $5000 if he perofrms. Kinky performs/
Lil Jon's promise to pay the additional $5000 is enforceable because the sound system failure was an unforeseen difficutly so severe as to excuse performance
Kinky contracts with Lil Jon to perform at Town Hall for $15K. Kinky refuses to sing unless he is paid $20K. Conviser promise to pay the additional $5000.
Conviser's promise is enforceable b/c he is not one of the original contracting parties
Under UCC, can you promise to do what you are already doing for more consideration?
YES - different from CL - as long as there is good faith, the parties can change the terms.
S contracts to sell grits to B for $1000. S then tells B it cannot deliver the grits for less than $1300. B promises to pay additional $300.
B's promise is legally enforceable so long as S was acting in good faith.
When can part payment of a debt be consideration for release from the debt?
ONLY if the debt is not yet due OR is disputed.
If the debt is due and undisputed, then part payment is NOT consideration for release.
D owes C $3000. The debt is due and undisputed. C and D agree that D will pay $2000 and C will not take any action to collect the remainder of the debt. D pays $2000. Did C recieve consideration for the promise to release the balance of the debt? Can C now collect the remaining $1000?
C did NOT receive consideration for the promsie to release and therefore, C can collect the remaining $1000.
What is the effect of a WRITTEN PROMISE to pay a debt barred by a technical defense (statute of limitations)?
The written promise is enforceable without consideration.
D owes C $1000. Legal action to collect the debt is barred by the statute of limitations. D writes C - I know I owe you $1000. I will pay you $600. Is there consideration for D's promise? What can C collect?
There is not consideration for D's promise but becuase it is a written promise to pay the debt (for which there is a legal defense) it is a consideraetion substitute
C can collect $600.
What are the elements of promissory estoppel?
Promise
Reliance that is reasonable, detrimental and foreseeable
Enforcement of the promise is necessary to avoid injustice.
Who lacks the capacity to contract?
1. Infant - under 18
2. Mental incompetents - lack ability to understand agreement
3. Intoxicated persons IF the other party has reason to know
What are the three consequences of incapacity?
1. Right to disaffirm by person without capacity
2. Implied affirmation by retaining benefits after gaining capacity
3. Libility for necessaries (quasi-contract)
Conviser hires Eric Cartman to lecture on Contracts for $100/lecture. If he lectures and Conviser refuses to pay, can Cartman sue for breach? IF Cartman does not do the lectures, can Conviser sue
Cartman can sue Conviser for breach - Conviser is not excused for any reason.
Conviser can't sue - Cartman is an infant and cannot contract.
What is a incapacity defendant's liabilty for necessaries?
Person w/o capacity is legally obligated to pay for things that are necessary - food, clothing, medical care and shelter.
FAlls under quasi-contract
What are the THREE primary Statute of Frauds issues?
1. Is the contract WITHIN the statute of frauds?
2. If so, is the STatute of Frauds SATISFIED - generally writing or performance
3. Is there a statute of frauds DEFENSE?
What are the kinds of contracts within the S/F?
1. Promise in consideration of marriage
2. Pormise by executor to guarantee debt of decedent
3. Promise to Creditors to guarantee the debts of another
4. Service contract not capable of being performed within a year from the time of contract
5. Transfers of interest in real estate of a term of more than a year
6. Sale of goods for $500 or more (UCC only)
7. Leases of goods with payments totalling $1000 or more (UCC only)
When do you have a promise in consideration of marriage that is w/in S/F?
Not a promise to marry BUT
Promise to do something or refrain from doing something IF we marry is within S/F
- H claims that W agreed to renounce any claim to property that he owned prior to the marriage if he would marry her - S/F applies
When is a promise by an executor to pay the claims of the decedent w/in S/F?
MUST BE GUARANTEE
- Creditor claims that executor personally guaranteed payment of D's debt in exhange for C's forbearing from suing for 6 months - S/F applies
When is a promise by someone to pay the debts of another w/in S/F?
MUST be a GUARANTEE
- Cannot just be a promise to pay the debts but rather a promise to pay if someone else does not - guarantee forming secondary liability
- EXCEPTION - main purpose
S delivers paint to P. When P fails to pay for the first delivery of paint, H promises S that if is continues to provide the paint to P on credit, H will pay S if P fails to pay S. Is H's promise w/in statute of frauds?
YES - this is a guarantee.
What is the main purpose exception to the rule that a guarantee to pay the debts of another is w/in S/F?
Where the main purpose of the action is for the benefit of the person guaranteeing payment.
- P is painting H's house, using paint that P buys from S on credit. When P fails to pay S, S refuses to deliver any more paint. H promises S that if she continues to provide paint to P that H will pay S if P fails to pay. H's promises is not w/in statute of frauds b/c of main purpose exception
What are the typical issues arising under service contract not capable of being performed w/in a year?
1. Specific time period for contract, more than a year - S/F applies
2. Specific time for performance designated more than a year from date of contract - S/F applies
3. Task but nothing said about time - S/F does not apply
4. Life - S/F does not apply
P claims that O agreed to employ her for three years and the deal was that P could terminate contract on 30 days notice - w/in S/F???
YES - S/F cares about whether P can PERFORM in less than a year (not about termination).
- Early termination is bar exam irrelevant
P claims that O agreed to employ her for a year, starting next month - does S/F apply?
YES - the starting point is the date of the agreement and this performance will not be completed within a year of that.
Where an agreement is over a task and there is no specified time for completion - is it capable of being performed w/in a year?
YES - S/F does not apply.
- Capable means theoretically possible with unlimited resources - ignore what actually happens
P claims that D hired him on 1/15/06 to cut all of the trees on D's land but P did not actually finish cutting till 12/2007 - is contract w/in S/F??
NO - b/c w/unlimited resources you can do anything in a year and we don't care what actually happened - this is capable of being performed w/in a year.
P claims that D hired her to work for her for the rest of P's life and P is only 21. Does S/F apply?
NO - S/F never applies to lifetime deals
When does a transfer of an interest in REAL ESTATE fall w/in S/F??
When the interest is for a term of MORE THAN A YEAR
1. Service contract no capable of being performed ....
2. Transfer of Interest in Real Estate of a Term of ....
1. WITHIN A YEAR from the date of contract
2. MORE THAN A YEAR
P claims that D agreed to build a house on Blackacre - is that w/in S/F?
NO - not a transfer of an interest in real estate
P claims that D agreed to sell Blackacre for $400 - is that w/in S/F??
YES - transfer of a fee simple (term more than a year)
- Price DOES NOT MATTER
P claims that D agreed to sell an easement on Greenacre for two years - w/in S/F?
YES - easement is an interest in property; term is for more than a year.
P claims that D agreed to lease Blackacre for one year - w/in S/F?
NO - term must be MORE than a year. If it is a transfer for just a year, then S/F does not apply.
How can the Statute of Frauds be satisfied?
Performance
Writing
If the statute of frauds is satisfied, do you have any defenses based on S/F?
NO - if the statute of frauds is satisfied, then there is no statute of frauds defense
If you have a service contract, how can your performance satisfy S/F?
There must be FULL PERFORMANCE by either party.
- Conviser and Ludacris agree that (1) Ludacris will write new mini review material and (2) Conviser will advertise the course as Ludacris minireview for five years. Ludacris completes the materials but Conviser continues to call it Conviser minireview.
- S/F is satisfied by Ludacris' performance
If you have a service contract, can you satisfy S/F by part performance?
NO
P agrees to work for D for three years. P works for 13 months and then D fires her. Is S/F satisfied? Does D have a S/F defense?
S/F is not satisfied and D has a S/F defense.
P cannot recover under contract law but may recover something under quasi-contract.
If you have a contract for sale of goods, how can performance satisfy the S/F?
General Rule - part performance of contract for sale of goods satisfies S/F but only to the extent of the part performance.
Is the question about S trying to get $$ for delivered goods (S/F satisfied) or B trying to get the undelivered goods delivered (S/F not satisfied).
S orally agrees to sell 2000 sacks of grits to B for $10,000. S delivers 600 sacks of grits and then sues for payment on those 600 sacks. Is S/F satisfied?
If B sues for the 1400 sacks that were not delivered
YES - S/F satisfied to the extent of the part performance.
NO - S/F not satisfied as to the undelivered goods
When is S/F satisfied for sale of specially manufactured goods?
If the goods are to be specially manufactured, then S/F satisfied when seller makes a SUBSTANTIAL BEGINNING.
Seller has done enough work that it is clear she is working on specially manufactured / custom made goods.
If the transaction is a transfer of real estate, how can performance satisfy S/F?
Part performance can satisfy - must be any two of the following three:
1. Full or part payment
2. Possession and/or
3. Impmrovements
If buyer of real estate makes full payment to seller, is S/F satisfied?
NO - must also have either possession and/or improvements.
In either a service contract or a real estate deal, how can a writing satisfy S/F?
1. Contents of the writing(s) - all material terms test (who and what) and
2. Who signed the writing - must be signed by D
"Law firm of Crane, Poole and Schmidt hereby agrees to employ Harriet Miers as an attorney for three years at $200K/yr." s/Denny Crane for firm. Firm wrongfully dismisses Miers. She sues, they assert S/F defense.
Firm does not have S/F defense - S/F satisfied. Writing contains the material terms and is signed by D (firm).
But if she were to breach and they sued her, she has a S/F defense b/c she has not signed.
In a contract for sale of goods (UCC), how can a writing satisfy S/F?
Look at contents of writing and who signed.
Contents must contain QUANTITY.
Generally, writing must be signed by D.
What is the answer the damn letter exception?
1. Both parties to sale of goods are merchants
2. Person who receives signed writing with a quantity term that claims there is a contract fails to respond w/in 10 days of receipt.
When does authorization for a person to enter into a contract for someone else have to be in writing?
Rules of law require that a person have written authorization to enter into K for someone else WHEN the CONTRACT TO BE SIGNED is w/in S/F. (EQUAL DIGNITY)
Sharon Stone rents an apartment in Dallas. She arranges for Epstein to sign the lease for her. Does Epstein need written authorization if the lease is for two months? Two years?
No written authorization if the lease is for two months (b/c lease itself is not w/in S/F).
Written authorization required for two years b/c lease is w/in S/F.
What do you look at to determine if the rules of law require written evidence of modification of a contract?
1. Look at the deal WITH the alleged change
2. Determine whether the deal with the alleged change would be within S/F
If so, then modification agreement must be in writing.
T leases bldg from L for one year. L later claims they agreed to increase the term to three years. Is written evidence of oral modification required?
YES - b/c deal w/change is more than one year and so under S/F.
If an agreement for service or real estate is in writing and requires all modifications be in writing - what result
IGNORE - CL - service/real estate - contract provisions requirng all modifications be in writing are NOT EFFECTIVE.
IF an agremeent for sale of goods is in writing and requires all modifications be in writing - what result?
VALID (unless waived) - UCC says that contract provisions requiring written modifications are effective unless waived.
If the subject matter of a contrac is illegal (paying $$ to someone to cause injury to someone else, what result?
CONTRACT IS VOID.
IF the subject matter of the contract is legal but the purpose is illegal, what result?
Agreement is enforceable only by the person who did not know of the illegal purpose
What are the elements of misrepresentation as a defense to contract formation?
False assertion of fact or concealment of facts
That induces the contract
Do not have to show fraud to rescind the contract but may have to show fraud to get reformation.
What are the elements of economic duress?
1. Bad guy - improper threat
2. Vulnerable guy - no reasonable alternative
What is the doctrine of unconscionability and when does it apply?
-Part of contract law generally
-Empowers court to refuse to enforce all or part of an agreement
TWO TESTS:
1. Unfair surprise (procedural)
2. Oppressive terms (substantive)
Tested at the time the agreement was made by the court.
When will misunderstanding or ambiguity in the words of an agreemnet defeat contract formation?
No contract if
1. Parties use a MATERIAL term that is open to at least two reasonable interpretations and
2. Each party attached different meanings to the term and
3. NEITHER party knows or has reason to know the term is open to at least two reasonable interpretations
What happens when one party knows of the misunderstanding of the other party?
There will be a contract under the terms as understood by the ignorant party.
When will a mutual mistake of material fact defeat contract formation?
No contract if
1. Both parties mistaken and
2. Basic assumption of fact
3. Mistake materially affects the agreed exchange
4. Not a risk that either party bears
What are the facts which are usually mistaken?
1. Subject matter - what it is
2. Value - what it is worth (not as likely to be deemed material)
When will a unilateral mistake of material fact defeat contract formation?
- Generally - courts reluctant to let party avoid contract for mistake by only one party
- Exceptions
1. Palpable mistake - other party knew or should have known of the mistake
2. Mistakes discovered before signficant reliance by other party
Integration
Written agreement that court finds is the final agreement
Triggers the parol evidence rule
Partial integration
Written and final but not complete
Complete integration
Written, final and complete
Merger clause
Contract clause such as -this is the complete and final agreement
Parol evidence
-Words of party(parties)
- Before integration (before agreement was put in written form)
- ORAL OR WRITTEN
Reformation
Equitable action to modify written contract to reflect actual agreement
What are the facts that trigger the parol evidence rule?
1. Written contract that court finds is the final agreement AND
2. Oral statement made AT TIME K was signed OR
3. Earlire oral/written stmts by parties to the contract
What are the likely parol evidence fact patterns?
1. Changing the written deal
2. Establishing a defense to enforcement of the written deal
3. Explaining ambiguous term in the written deal
4. Adding to the written deal
Can parol evidence be admitted to change the written deal??
NO - court cannot consider earlier agreements as a SOURCE OF TERMS that are INCONSISTENT with the terms of the written contract.
Does not matter whether writing is complete or partial.
Court can consider evidence of terms for purpose of determining whether there was a mistake in integration (clerical mistake in reducing it to writing).
Can a court consider statements made by parties AFTER contract is signed?
YES - not a parol evidence problem
When can a court consider parol evidence to establish a defense to legal enforcement?
P wants to get out of the contract
Parol evidnece rule does not prevent court from considering earlier words of the parties for the limited purpose of determining whether there is a defense to enforcement.
Does not matter whether partial or complete integration
When can a court consider parol evidence to explain a contract?
Earlier agreements can be considered to resolve ambiguities in the written contract.
When can the court consider parol evidence of additional terms?
Only if the court finds that the written agreement was a partial integration OR that the additional terms would usually be in a separate agreement.
Otherwise, court cannot consider earlier agreements as source of consistent, additional terms.
What fact is required to trigger parol evidence rule question?

What fact will most often trigger S/F question?
1. Written contract

2. Oral Contract
What do the courts look to besides words of the parties to determine terms of the contract?
Conduct of the parties (course of performance)
Course of dealing b/t parties
Custom and usage (to explain words and fill in gaps)
What are the default terms supplied by UCC?
-Delivery obligations of seller
-Risk of Loss
-Warranties of Quality
-Contractual limitations on WArranty Liability
Under UCC, if no place of delivery has been agreed upon in K, what is required?
Place of delivery is the seller's place of business UNLESS both parties know that the goods are some place else (then that place is place of delivery).
If the contract requires delivery by a commmon carrier, what does the seller have to do to complete delivery obligation?
DEPENDS - Is it a
Shipment contract OR
Destination contract
What is a shipment contract?
Seller completes its delivery obligation when it
1. Gets the goods to the common carrier AND
2. Makes reasonable arrangements for delivery AND
3. Notifies the buyer
MOST CONTRACT ARE SHIPMENT CONTRACTS
What is a destination contract?
Seller does not complete delivery obligation until the goods arrive where the buyer is
FOB
To determine whether a shipment contract or a destination contract.
If FOB is followed by city where seller is/goods are - shipment contract.
If FOB is followed by any other city - destination contract
When do risk of loss issues arise?
1. After K has been formed but before bueyer receives goods
2. The goods are damaged or destroyed and
3. Neither buyer nor seller is to blame
If the risk of loss is on the buyer....
He has to pay full contract price for lost/damaged goods
If risk of loss is on seller...
No obligation on buyer.
Seller may be liable for nondelivery.
What are the four risk of loss rules?
Do 1, then 2, then 3, then 4.
1. Agreement
2. Breach
3. Delivery by common carrier other than seller
4. No agreement, no breach, no delivery by carrier
If there is an agreement as to risk of loss....
The agreement controls.
If there is no agreement as to risk of loss and one party has breached ....
Breaching party is liable for any uninsured loss even though breach is unrelated to the problem.
If there is no agreement as to risk of loss and no breach, but there is delivery by common carrier other than the seller who bears risk of loss?
Risk of loss shifts from seller to buyer AT TIME SELLER COMPLETES DELIVERY OBLIGATIONS
- Depends on whether shipment K or destination K
If no agreement, breach or delivery by common carrier, and seller is a merchant, then who bears the risk of loss?
Risk of loss shifts from merchant-seller to buyer on buyer's RECEIPT of goods.
If no agreement, breach or delivery by common carrier, and seller is not a merchant, then who bears the risk of loss?
Risk of loss shifts from non-merchant seller when seller TENDERS the goods
What is a tender?
When seller makes the goods available by telling buyer where they are and how he can pick them up
When do you have an express warranty of quality?
Words that promise, describe or state facts
OR
Use of a sample or model
When do you have an implied warranty of merchantability and what is the effect?
The seller is a MERCHANT - IT DEALS IN GOODS OF THAT KIND (you buy a necklace from a jewelry store)
The warranty is that the goods are fit for ordinary purposes
When do you have an implied warranty of fitness for a particular purpose?
Buyer has a particular purpose and buyer is relying on seller to select suitable goods AND seller knows/has reason to know of the purpose.
(shoes for wall st interview)
Warranty - goods are fit for the particular purpose
What is the effect of a disclaimer of warranty liability - "there are no warranties"?
Eliminates the implied warranties (merchantability and fitness) - as is, with all faults; CONSPICUOUS language of disclaimer.
Express warranties cannot be eliminated.
What is the effect of a limitation of remedies in a contract?
-Does not eliminate warranty - just limits/sets recovery
- Can limit remedies even for express warranties
- Limitations not ok if unconscionable - breach of warranty on consumer goods causes injury
Under the common law, what is required for PERFORMANCE?
Look to the contract
What are the six concepts re: performance in a sale of goods (UCC)?
1. Perfect Tender
2. Rejetion of Goods
3. Cure
4. Installment Sales Contract
5. Acceptance of Goods
6. Revocation of Acceptance
What is perfect tender?
General standard - seller is obligated to deliver perfect goods.
- 99 green and 1 yellow widgets is NOT perfect.
When can buyer REJECT goods?
- Must occur before acceptance of goods.
- IF goods are less than perfect, then buyer can
1. Reject whole or any units OR
2. retain and sue for damages
UNLESS CURE, INSTALLMENT K, ACCEPTANCE
When can the seller CURE?
SEller who fails to make a perfect tender will get to cure if
1. Seller had reasonable ground to believe that the improper tender would be ok (prior deals)
2. Time for performance has not yet expired
What is an installment sales contract?
Contract that requires / authorizes
1. Delivery in separate lots
2. To be separately accepted
Buyer has right to reject installment only where there is a substantial impairment in that installment that can't be cured.
What is the effect of acceptance of the goods?
CANNOT later reject them
If you pay without an opportunity to inspect, is there acceptance?
NO - if you use a credit card to buy something off the internet, you have not accepted
When do you have implied acceptance?
IF the buyer retains the goods after opportunity for inspection
- Fact pattern will state when the buyer received the goods and when buyer first complained to seller
When can a buyer effect cancellation of the contract by revoking acceptance of goods?
1. If there is a nonconformity that substantially impairs the value of the goods AND
2. There is excusable ignorance of grounds for revocation or reasonable reliance on seller's assurance of satisfaction AND
3. There is revocation w/in a reasonable time after discovery of the nonconformity
What are the three rules of payment?
1. PAyment can be by any manner current in ordinary course of business
2. Seller can demand cash
3. If seller demands cash, buyer has additional reasonable time
What are the types of nonmonetary remedies for unexcused nonperformance?
- Specific performance / Injunction
- Reclamation
- Rights of good faith purchaser in entrustment
When can you get specific performance and when not?
Specific performance IF
- Contract for sale of real estate
- Contract for sale of unique goods (antiques, etc)
NO specific performance if contract for services (possible injunction)
What is reclamation?
Right of unpaid seller to get its goods back
- Buyer must have been insolvent at time that received goods and
- Seller must demand return of goods w/in 10 days OF RECEIPT (not of contract)
- Buyer still has goods at time of demand
What are the rights of a good faith purchaser in entrustment?
Owner leaves goods w/person who sells goods of that kind
That person wrongfully sells goods to third party
Third party is good faith purchaser - cuts of rights of original owner
What are the major issues re: money damages?
- Measure of damages
- Damages Rules for Sales of goods
- Additions and Limitations
- Contract provision re: damages (liquidated damages)
What is the general approach to measuring damages?
EXPECTATION - put P in same economic position as if contract had been performed
- P contract to paint O's house for $1000. P anticipates making $200 profit. O breaches after P has started work and used $100 of paint and labor. Expectation damages is $300.
What is protection of reliance interest?
Damages work to put PLAINTIFF in same economic position as if K had never happened?
P contract to paint O's house for $1000. P anticipates making $200 profit. O breaches after P has started work and used $100 of paint and labor. Reliance damages is $100.
What is protection of restitution interest?
Damages put DEFENDANT in same economic position as if K had never happened.
P contract to paint O's house for $1000. P anticipates making $200 profit. O breaches after P has started work and used $100 of paint and labor. Restition damages have to put a value on the work that has been done
What is the general damges policy in UCC for sale of goods and what are the two important facts?
Generall - expectation damages.
Two facts - who breached; who has the goods
What are the damages if seller breaches and buyer keeps the goods?
Fair market value if perfect MINUS fair market value as delivered
What are the damages if seller breaches and seller keeps the goods?
Market price at time of discovery of the breach MINUS contract price
OR
Replacement price MINUS contract price
What are the damages if buyer breaches and buyer keeps the goods?
Contract Price
What are the damages if buyer breaches and seller has the goods?
Contract price MINUS market price at time and place of delivery
OR
Contract price MINUS resale price
Sometimes plus lost profits
When can a seller recover lost profits when the buyer breaches and the seller has the goods?
Two critical facts:
- Fact pattern will make it clear that what is involved is regular inventory - seller has lots of this stuff
- Contract, breach and a resale for exactly the same price
BUT have to remember that they could have had two sales then - they can recover the lost profits
Leather goods
What are the additional damages recoverable besides expectation?
1. Incidental damages - costs occurred in dealing w/breach - always recoverable
2. Foreseeable consequential (special) damages
When are consequential damages recoverable in addition to expectation damages?
Consequential damages are damages arising from P's special circumstances.
Recoverable only if D had reason to know of those special circumstances at time of contract.
What are the limitations on damages recoverable?
-Avoidable damages - no recovery for damages that could have been avoided w/o undue burden on P
- Certainty limitation - damages must be reasonable certain
When is a contract provision re: damages invalid?
Look at whether the provision is too high
Test:
1. Damages were difficult to forecast at time contract was made
2. Provision is a reasonable forecast
What are the problems of excuse for nonperformance?
1. Excuse b/c other guys improper performance
2. Excuse b/c failure of performance condition
3. Excuse of performance b/c of other party's anticipatory repudiation or inability to perform
4. Excuse by reason of a later contract
5. Excuse of performance b/c of later unforeseen event
For service/real estate contracts, when does other guy's improper performance excuse my performance?
1. Damages can be recovered for any breach
2. Only a material breach by one guy excuses other from performing
3. Whether breach is material is a fact question
When contract is for same act/service repeatedly (painting 10 apartments), when is breach material?
When promisee does less than half - then O does not have to pay.
UNLESS contract says that P is paid per apartment - then materiality looks at individual apartments
Under UCC, when does seller's improper performance excuse B?
When there is less than perfect tender
What is a performance condition?
Mutually agreed upon promise modifier - language in a contract (not just in response to an offer) that limits obligations created by other language in K.
Look for - if, provided that, so long as, subject to, in the event that, unless, when, until, on condition that
- Distinguish from conditional acceptance and covenant
What is the standard for satisfying an express condition?
Generally - there must be strict compliance with performance contditions
How can an express condition be excused?
By estoppel or waiver
Estoppel - statement by person protected before conditioning event was to occur and requires change of position
Waiver - statement by person protected after conditioning event was to occur; no change in position

1. Identify person who benefits from/is protected by condition
2. Look for statement by that person giving up the benefits / protections of condition
What is anticipatory repudiation?
Unambiguous statement by party that she is not going to do what the contract requires her to do
- immediate claim for damages for breach (unless P has already finished her performance)
When/how can anticipatory repudiation be reversed/retracted?
As long as there has not been a material change in position by either party
If repudiation is timely retracted, then duty to perform is reimposed but performance can be delayed until adequate assurance is provided.
What is inability to perform?
In a barter transaction usually - where the thing bartered for is no longer available
What is recission and what is its effect?
Recission is cancellation of the contract.
Recission will NOT be valid if the party has completed the work.
What is an accord? What is satisfaction?
Agreement by the parties to an already existing obligation to accept a different performance in satisfaction of the existing obligation.
Satisfaction is the agreed different performance
What is the effect of accord and satisfaction?
If the new agreement (accord) is performed (satisfaction), then performance of the original obligation is excused.
If the accord is not performed, then other party can sue either on original obligation OR accord.
What is modification?
Modification is a substituted agreement - agreement by parties to an existing obligation to accept a different agreement in satisfaction of the existing obligation
- Cannot then recover on the original loan agreement
What is novation?
An agreement b/t both parites to an existing contract to the substitution of a new party - same performance, different party
Who is liable after novation?
Novation excuses the contract for performance of the party who is subsituted for or replaced
How is delegation different from novation?
Novation requires agreemetn of BOTH parties to original contract and excuses person replaced from any liability.
Delgation does not require agreement and does not excuse
When does a later, unforeseen event excuse contract performance?
1. Only excuses contractual duties
2. Something happens after contract formation but before completion
3. That was unforeseen
4. Makes performance impossible, commercially impracticable or frustrates purpose of performance.
- Most likely won't satisfy impossibility and have to perform
What are specific issues raising excuse by impossibilty?
- Damage or destruction or subject matter of contract after contract (no effect where the risk of loss has already shifted to buyer)
-Death after contract - only excuse if special person
- Subsequent law or regulation
If a subsequent law makes performance of contract illegal....
excuse by impossibilty
If subsequent law makes mutually understood purpose of contract illegal....
excuse by frustration of purpose
How to distinguish b/t accord and satisfaction and modification?
Accord and satisfaction agreement will state IF x is done, THEN debt is discharged.
Third party beneficiary
Not a party to contract - able to enforce contract others made for her benefit
In a third party beneficiary problem, who is the promisor>
Look for the person who is making the promise that benefits the third party
In a third party beneficiary problem, who is the promisee?
Look for the person who OBTAINS the promise that benefits the third party
When is a third party beneficiary intended rather than incidental?
When the contract names and identifies the third person
What is the difference b/t a third party beneficiary who is a donee and one who is a creditor?
Usually intended beneficiary is a donee - look for if the beneficiary was a creditor of the promisee.
When can the third party beneficiary interfere with the parties attempts to change or modify the contract?
Only if she knows of and has relied on or assented to the contract - then her rights have vested and contract cannot be changed without her consent (unless contract provides otherwise)
In a third party beneficiary situation, who can sue whom?
1. Beneficiary can sue promisor
2. PRomisee can sue promisor
3. Donee beneficiary cannot sue promisee
4. Creditor beneficiary can sue promisee on pre-existing debt
If the third party beneficiary sues the promisor, what defenses does promisor have?
Any defense that he would have had if sued by promisee, such as material non-performance by promisee.
What is an assignment?
Transfer of rights under the contract in TWO separate steps:
1. Contract b/t only two parties
2. One of the party's LATER transfer of rights under that contract to a third party
(Different from 3rd party beneficiary b/c 3rd party bene will be included in the contract)
What is an assignor?
Party to the contract who later transfers rights under the contract to another
What is an assignee?
Not a party to the contract - able to enforce the contract because of the assignment
What is an obligor?
In a assignment, the obligor is the other party to the contract (the one who did not assign)
When a contract prohibits assignments what result?
Rights hereunder are not assignable
Prohibition takes away RIGHT to assign but not POWER to assign.
Assignor is liable for breach of contract BUT assignee who does not know of the prohibition can still enforce the assignment.
When a contract invalidates assignments, what result?
All assignments of rights under this contract are void
Invalidation takes away both right to assign and power to assign
There is breach by assignor and no rights in assignee
What are the limits on assignments?
1. Contract provisions - prohibition and invalidation
2. Common law
What limits does common law set on assignments?
Bars an assignment that substantially changes the duties of the obligor
- Assignment of right to contract performance OTHER than right of payment is generally NOT ok
What are the requirements for assignments?
1. Consideration is NOT required
2. Must be a present assignment - cannot be a promise to collect and then pay or a promise to assign
3. Must be existing rights - cannot be future (ok if conditional)
What are the rights of the assignee?
1. Can sue obligor
2. Obligor has same defenses against assignee as it would have against assignor
3. Payment by obligor to assignor is effective until obligor knows of the assignment (so are modification agreements)
4. In assignment for consideration, assignor warrants that he will do nothing to impair the value of the assignment
Where there are multiple gratuitous assignments, what is the rule over who wins?
Generally - last assignee wins (making of another assignment serves to revoke any ealier ones)
When is a gratuitous assignment not revocable?
When it is the subject matter of a writing delivered to assignee, assignee recieved indicia of owenership, or assignee relied in way that is reasonable, foreseeable, detrimental.
IF initial assignment is not revocable, then later assignment will lose.
When there are multiple assignments for consideration - who wins?
Generally - first assignment for consideration wins (no matter the size of the consideration)
When does the subsequent assignee take priority over earlier assignee for value (exception to general rule)?
Only if
- he does no konw of the earlier assignment AND
- he is first to get payment, judgment, novation, or indicia of ownership
-being the first to notify obligor does not matter
What is a delegation?
Where the party to a contract transfers work under that contarct to third party
Which duties under a contract are delegable?
Generally - contractual duties are delegable
UNLESS
- contract prohibits delegations or prohibits assignments or
- contract calls for very special skills or
- person to perform contract has very special reputation
What happens if the third party delegatee does not perform?
Delegating party ALWAYS remains laible
2. Delegatee liable only if she received consideration from teh delegating party
- Other party (not the one that delegated) can sue delegatee to enforce the contract b/c third party beneficiary
What limits does common law set on assignments?
Bars an assignment that substantially changes the duties of the obligor
- Assignment of right to contract performance OTHER than right of payment is generally NOT ok
What are the requirements for assignments?
1. Consideration is NOT required
2. Must be a present assignment - cannot be a promise to collect and then pay or a promise to assign
3. Must be existing rights - cannot be future (ok if conditional)
What are the rights of the assignee?
1. Can sue obligor
2. Obligor has same defenses against assignee as it would have against assignor
3. Payment by obligor to assignor is effective until obligor knows of the assignment (so are modification agreements)
4. In assignment for consideration, assignor warrants that he will do nothing to impair the value of the assignment
Where there are multiple gratuitous assignments, what is the rule over who wins?
Generally - last assignee wins (making of another assignment serves to revoke any ealier ones)
When is a gratuitous assignment not revocable?
When it is the subject matter of a writing delivered to assignee, assignee recieved indicia of owenership, or assignee relied in way that is reasonable, foreseeable, detrimental.
IF initial assignment is not revocable, then later assignment will lose.
When there are multiple assignments for consideration - who wins?
Generally - first assignment for consideration wins (no matter the size of the consideration)
When does the subsequent assignee take priority over earlier assignee for value (exception to general rule)?
Only if
- he does no konw of the earlier assignment AND
- he is first to get payment, judgment, novation, or indicia of ownership
-being the first to notify obligor does not matter
What is a delegation?
Where the party to a contract transfers work under that contarct to third party
Which duties under a contract are delegable?
Generally - contractual duties are delegable
UNLESS
- contract prohibits delegations or prohibits assignments or
- contract calls for very special skills or
- person to perform contract has very special reputation
What happens if the third party delegatee does not perform?
Delegating party ALWAYS remains laible
2. Delegatee liable only if she received consideration from teh delegating party
- Other party (not the one that delegated) can sue delegatee to enforce the contract b/c third party beneficiary
What limits does common law set on assignments?
Bars an assignment that substantially changes the duties of the obligor
- Assignment of right to contract performance OTHER than right of payment is generally NOT ok
What are the requirements for assignments?
1. Consideration is NOT required
2. Must be a present assignment - cannot be a promise to collect and then pay or a promise to assign
3. Must be existing rights - cannot be future (ok if conditional)
What are the rights of the assignee?
1. Can sue obligor
2. Obligor has same defenses against assignee as it would have against assignor
3. Payment by obligor to assignor is effective until obligor knows of the assignment (so are modification agreements)
4. In assignment for consideration, assignor warrants that he will do nothing to impair the value of the assignment
Where there are multiple gratuitous assignments, what is the rule over who wins?
Generally - last assignee wins (making of another assignment serves to revoke any ealier ones)
When is a gratuitous assignment not revocable?
When it is the subject matter of a writing delivered to assignee, assignee recieved indicia of owenership, or assignee relied in way that is reasonable, foreseeable, detrimental.
IF initial assignment is not revocable, then later assignment will lose.
When there are multiple assignments for consideration - who wins?
Generally - first assignment for consideration wins (no matter the size of the consideration)
When does the subsequent assignee take priority over earlier assignee for value (exception to general rule)?
Only if
- he does no konw of the earlier assignment AND
- he is first to get payment, judgment, novation, or indicia of ownership
-being the first to notify obligor does not matter
What is a delegation?
Where the party to a contract transfers work under that contarct to third party
Which duties under a contract are delegable?
Generally - contractual duties are delegable
UNLESS
- contract prohibits delegations or prohibits assignments or
- contract calls for very special skills or
- person to perform contract has very special reputation
What happens if the third party delegatee does not perform?
Delegating party ALWAYS remains laible
2. Delegatee liable only if she received consideration from teh delegating party
- Other party (not the one that delegated) can sue delegatee to enforce the contract b/c third party beneficiary